Agriboard International LLC v Deputy Controller of Patents and Designs (2022)

Summary

“The present appeal under section 117A (2) of the Patents Act, 1970” “challenges the impugned order passed by the Deputy Controller of Patents & Designs dated 16th June, 2021. By the impugned order, the Appellant’s patent application bearing no. 202014010848 for the invention ‘Efficient Method and Apparatus for Producing Compressed Structural Fiberboard’” “has been refused on the ground of lack of inventive step under Section 2(1)(ja) of the Act.” (para 4) “In the First Examination Report (hereinafter ‘FER’) dated 21st July, 2020 objections relating to novelty under Section 2(1)(j) of the Act on the ground of the subject invention being anticipated, and lack of inventive step under Section 2(1)(ja) of the Act for the invention being obvious were taken.” (para 6) The Court recorded that “In the impugned order, the IPO” (“Indian Patent Office”) “has quoted a paragraph from the FER and has rejected the application on the conclusion that the invention does not disclose inventive step under Section 2(1)(ja) of the Act.” (para 13)

The Court held that “The order simply extracts the objection from the FER and does not discuss the response given by the Appellant. Thus the impugned order is completely lacking in reasoning.” (para 20) “In the opinion of this Court, while rejecting an invention for lack of inventive step, the Controller has to consider three elements” — “the invention disclosed in the prior art,” “the invention disclosed in the application under consideration, and” “the manner in which subject invention would be obvious to a person skilled in the art.” (para 24) It ordered that “the impugned order dated 16th June, 2021 rejecting the patent application of the Appellant is set aside and the matter is remanded back to the IPO for a fresh consideration.” (para 27)

What the court decided

1. An order without reasons. “The order simply extracts the objection from the FER” (“First Examination Report”) “and does not discuss the response given by the Appellant. Thus the impugned order is completely lacking in reasoning. Except simply coming to a conclusion that the invention is lacking in inventive step, there is no discussion whatsoever in the impugned order as to the manner in which the Appellant sought to distinguish D1 from the subject invention. Also, there is no reasoning by the Controller as to why the subject invention would be hit by prior art D1.” (para 20)
2. Reasons as part of natural justice. The Court recorded that “The Supreme Court in Assistant Commissioner v. Shukla and Brothers (supra), has categorically held that passing of a reasoned and a speaking order is an integral part of the principle of audi alteram partem” (para 22), and that in Manohar v. State of Maharashtra “it has been categorically observed that application of mind and recording of reasoned decision are the basic elements of natural justice. There can be no doubt that scrupulous adherence to these principles would be required while rejecting patent applications.” (paras 22–23)
3. The three elements of inventive step. “In the opinion of this Court, while rejecting an invention for lack of inventive step, the Controller has to consider three elements” — “the invention disclosed in the prior art,” “the invention disclosed in the application under consideration, and” “the manner in which subject invention would be obvious to a person skilled in the art.” (para 24)
4. No bare conclusion. “Without a discussion on these three elements, arriving at a bare conclusion that the subject invention is lacking inventive step would not be permissible, unless it is a case where the same is absolutely clear.” (para 25)
5. From existing knowledge to the invention. “Thus, the Controller has to analyse as to what is the existing knowledge and how the person skilled in the art would move from the existing knowledge to the subject invention, captured in the application under consideration. Without such an analysis, the rejection of the patent application under Section 2(1)(ja) of the Act would be contrary to the provision itself.” (para 26)
6. Features absent from D1. “Moreover, the subject patent specification, in the summary, clearly discloses that the extruding ram is actuated and driven by linear actuators; monitoring the density of the compressed structural fiberboard and utilising a programmable logic controller to monitor and adjust the speed at which the compressed structural board is produced to control the density of the compressed structural fiberboard. These elements are not contained in the prior art D1. In fact, in D1, the manner in which the extruding ram is mounted and the manner in which it functions appears to be completely different” (para 20). The Court noted that “the US Patent Office has come to the conclusion that there is a significant change in the operating principle of the ram itself.” (paras 19–20)
7. Prior art cited only on appeal. The Court recorded that counsel for the Respondent “has sought to rely upon the ISR” (“International Search Report”) “issued by the PCT Office and other prior art which also discloses electric linear actuators. However, none of these have been considered in the impugned order. In the impugned order, the Controller has simply arrived at a conclusion, without any reasoning whatsoever, that the subject invention is lacking inventive step.” (para 21)
8. Procedure. Remand. “In view of the above discussion, the impugned order dated 16th June, 2021 rejecting the patent application of the Appellant is set aside and the matter is remanded back to the IPO” (“Indian Patent Office”) “for a fresh consideration. As part of the said consideration, the IPO is permitted to consider the prior art D1 as also other prior arts and the ISR issued by the PCT office, which are now cited by the Respondent” (para 27). “Let the same be considered and an order be passed within four months from today.” (paras 27–28)

What the court did not decide

“The remaining prior arts which are cited by ld. Counsel having not been considered in the impugned order, the Court does not wish to render any opinion in this regard.” (para 26) “The observations made in the present order qua D1, would not be binding on the Controller.” (para 28)

Subsequent treatment

• Followed — Calico Life Sciences v Joint Controller of Patents and Designs (2026), relying on Agriboard, held that “while rejecting an invention for lack of inventive step, Controller has to consider three elements” (para 18).